Employment Market Fluctuates, September Rate Cut Becomes Consensus
Over the past week, two events have primarily influenced the market: Trump and Musk's argument, and the US employment data. More sadly, these are all US issues. While the US stock index has been hitting new highs almost daily, the crypto market continues to be hurt, with Bitcoin oscillating without breaking its previous high. Many contract positions have been liquidated, no wonder crypto investors now prefer trading US stocks.
VX: TZ7971
The US stock performance is due to market expectations that the Federal Reserve will restart the rate cut cycle in September. Fortunately, Bitcoin could break through $110,000 after the small non-farm employment data was released, with some pullback over the weekend, but overall maintaining the $108,000 level and temporarily preserving its upward momentum.
Currently, the biggest resistance on the daily line is $110,000. Since this price has been tested 3 times, if it cannot stabilize at $110,000 or create a new high, the short-term risk of pullback to $106,000 or even $103,000 will gradually increase. The market trend this month will largely depend on US market news and event-driven factors.
Tariff Negotiation Deadline Approaches, Beware of Sudden Changes
This week, the US will publish fewer economic data compared to last week. Pay attention to the Federal Reserve meeting minutes and unemployment figures on Thursday. Since the July interest rate meeting is at the end of the month, Thursday's early morning Federal Reserve meeting is mainly focused on board members' views on the current economic situation, especially their attitude towards rate cuts. Later that night, the latest unemployment numbers will be released, so market volatility will be significant that day.
Another key point to watch is the consultation status between various countries and the US before the July 9th tariff suspension deadline, especially Trump's statements. If negotiations with other countries suddenly break down, it could cause stock and crypto market turbulence. Starting Monday, the US will successively announce different trade agreements. If everything goes smoothly, at least the US stock performance will be optimistic, as long as trade agreements with China, EU, Japan, and other countries remain unchanged.
The market was originally concerned about tariff issues, but US Treasury Secretary Bezos spoke last night, saying that countries without tariff agreements by August will revert to April 2nd tariff levels. This effectively extends the tariff negotiation deadline to the end of July, making the July 9th deadline less critical. Consequently, Bitcoin directly broke through $109,000 in the morning.
This week still requires special attention to Trump's statements on tariffs and Musk, as his intentions remain unpredictable. If an unexpected reaction occurs, market trends could quickly reverse. However, if Trump and Musk do not have serious confrontations and tariff progress is good, Bitcoin might return to $110,000 this week and even challenge new highs.
Impact of "Big and Beautiful" on Market Trends
Short-term Outlook (Next Few Months)
Including tax cuts and increased spending could stimulate the economy. This might boost stock prices in the coming months, with recent market showing an upward trend. On July 3rd, 2025, the S&P 500 and Nasdaq indexes hit historical highs. For crypto, the market value grew 0.37% on July 4th, 2025, driving Bitcoin to break $110,000 for the third time, showing an initial positive response that might be driven by economic stimulus measures.
Long-term Outlook (2026 and Beyond)
Long-term, the bill is expected to increase the deficit by $2.8 trillion by 2034, potentially triggering inflation, thus possibly raising interest rates, slowing economic growth, and negatively impacting the stock market in 2026. For crypto, rising inflation might make Bitcoin more attractive as a hedging tool. However, given the current high correlation between crypto and US stock markets, higher interest rates could challenge risk assets, bringing uncertainty.
"Big and Beautiful" might boost stock and crypto markets in the short term through economic stimulus, with recent data supporting this view. Combined with expected rate cut cycle restart, the market could have an optimistic trend in the second half of 2025, with high chances of new highs for US stock indexes and Bitcoin. However, by 2026, the stock market might face negative impacts from deficit and rising interest rates. As crypto is highly correlated with stocks, it may face challenges with economic slowdown and high interest rates, potentially entering a bear market.
